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6 Keys to Improvement (Part 2)

By Ted Annis, BRC President

“Improvement” is one of the 7 management principles outlined within ISO 9001:2015 and is a fundamental component of any management system. We often see organizations making a commendable effort to improve processes, procedures, products, etc. Unfortunately, we also see some companies that are paralyzed by the process. The intent and effort are there, but while searching for a perfect solution they miss many opportunities for incremental improvements.

Do you recall the “Leaping Frog” problem from grade school math? A frog starts in the centre of a pond and tries to hop out, but each leap covers just half the remaining distance to the edge of the pond. Will the frog ever reach land? The answer, of course, is “no”. Although in time he will come frustratingly close, he will always leap just half the distance and will never reach his goal (unless we use university math, which I long ago swore not to revisit).

In Part I we introduced the importance of Continual Improvement as one of the management principles and a fundamental component of any management system. Our keys to help shape your continual improvement strategy are not all-encompassing…rather some suggestions on how to mould and shape your approach.

Keys 1-3 from Part I…

Understand “Continuous” vs. “Continual”

Set Goals (Objectives) and Take Steps

Avoid Perfectionism as a Hindering Behaviour

In Part 2 we’ve got 3 more suggestions to share…

4. Find Opportunities for Improvement

“Opportunity” is a great, optimistic word. It is used frequently in sales and marketing in reference to profit that can come from increased revenue. Unfortunately, it is much less often used in reference to design, development and production. An increase in sales will help the bottom line, but so will a reduction of costs!

With this in mind, one way to fuel your Continual Improvement efforts is to encourage your team to look for opportunities to improve. We can do this during formal audits, but we can also do it as part of our everyday activities…as long as you are able to create and maintain a culture that encourages it. If you look at it this way, Continual Improvement becomes a simpler process to:

Implement improvements wherever possible and acknowledge those who made contributions. Look at each improvement as an opportunity to acknowledge and communicate.

Monitor and measure any and all quantifiable results of the improvements (e.g. 8% reduction in waste material and the associated $ savings).

Report these results as a regular part of your management review meetings, which helps to remind everyone that quality can have a positive impact on the bottom line, too.

Ask yourself how you can structure your procedures and approach to help ensure a focus on opportunities for improvement. One simple way is to supplement your audit checklist with questions that specifically inquire about possible improvements. “How do you think we could improve this process?” or “What changes might make you better at your job?”

5. Don’t Be Afraid to “Cross the Chasm”

Most of our tips here are related to Kaizen-oriented thinking and behaviour, where continual small, incremental improvements provide tremendous improvements in performance and results over time.

But we should also be careful not to avoid or ignore opportunities to “Cross the Chasm” by introducing drastic change to replace inefficient or ineffective practices. Within a continual improvement culture there is room for both approaches, and they complement each other nicely.

6. Take a Lesson from the Frog

Thinking back to our friend the frog, who can only ever jump half the distance to his goal…

Remember that setting lofty objectives and targets (even unattainable ones) is encouraged as long as you don’t lose sight of the organization’s main goal – increasing profit. That goal does not come with an absolute finish line…or any measure of perfection…just the need to continually improve.

So, work to implement improvements wherever possible, then measure their impact and advertise those benefits as a way to provide recognition and encourage more participation. It is a “continual” process.

We may never quite reach our objective, but it is clearly in our best interest to keep hopping!

NOTE

Question:

My question for you is on our CPQ Sheet, it asks if the parts can be salvaged and then asks for an estimated cost to fix or estimated cost to scrap. Can I take that off the sheet completely?

- Anonymous

Answer:

Based on the copy of the sheet provided, the acronym CPQ probably stands for Cost of Poor Quality. The objective is to manage the non-conformity, then assess the impact on the efficiency and effectiveness of the process. This is completely consistent with the intent of sections 8.7 and 4.4.1 of the ISO 9001:2015 Standard. Presumably, this impact would then be reported as a summary, or indicative of a trend, to management at operational or management review meetings.

The only characteristic I might add is the lost productivity calculation, for the time wasted making the non-conforming product.

You are doing something worthwhile that adds value to the business. Please continue to collect the data and report to management so that decisions can be made to improve the processes and systems based on data rather than suspicion.

NOTE – This article appears in Issue #180 of The Quality Review.

Quality Failure – The Global Financial Crisis

How do you even begin to dissect the myriad of events leading up to the Global Financial Crisis?

Paul Moore, former head of group regulatory risk at HBOS (part of the Lloyds Banking Group since 2009), provides an explanation straight from the horse’s mouth. Moore was dismissed from his role in 2004, after he warned senior executives of the perils of excessive risk-taking. Five years later, HBOS was one of the UK’s most high-profile victims of the credit crunch, requiring a takeover and billions of pounds in government bailout money to stay afloat. Moore was the only senior risk and compliance executive in the UK banking sector to speak out publicly and dubs the crisis ‘the biggest quality failure of all time.’

It was during his time at American Express as head of compliance that Moore was charged with implementing total quality management – a project that saw him compete for the Baldridge award. He theorised that if the financial sector thought in terms of quality rather than risk, compliance or governance, and positioned culture and people above processes and structure, the events leading up to the crisis could have been avoided. Stringent governance processes mean nothing, Moore argues, if they are ‘carried out in a culture of greed, unethical behaviour and an indisposition to challenge.’

Moore points to the improper selling of pensions, endowment, home income plans, precipice bonds, interest rate swaps and PPI as examples of unethical behaviour. He draws parallels with the manufacturing industry, likening the devastating effects intangible financial promises had on consumer health and sentiment to ignoring risks associated with safety-related products (car brakes, tires, airbags, etc.).

Regulatory changes in response to the Global Financial Crisis have been significant. In general, there has been widespread recognition of the conflict of interest faced by many of the parties that had traditionally been responsible for identifying and quantifying risk. Specifically, the crisis has made clear that, in spite of what appeared to be individually sound and well-supervised financial institutions, well-functioning financial markets, well-diversified risks, and robust institutional infrastructures, systemic risks emerged, yet went undetected or not addressed for some time and then created great havoc. Policymakers were not thinking of the system as whole when engaging in risk management, with catastrophic results.

ISO 9001:2015 – Tools and Suggestions to Begin the Move (Part 2)

I was not a very good student in high school. (That was back when the earth was still cooling.) Anyway, I did enjoy history and literature. One of my favorite authors – Jack London – told a “cold” and tragic short story “To Build a Fire.”

The essence was about a tracker/traveller in the Klondike and one particularly cold day (-50ºF) he was out by himself and, as circumstances turned out, in a desperate situation. His only means to survive while waiting for help was to find shelter and build a fire. He found what appeared to be a good location, well protected by trees for a windbreak. The challenge was being alone, with the bitter cold and being short on matches. With the last match, he was able get a fire going. (I’m making a short story shorter.) Anyway, he actually was able to get a really good fire going and there is hope. Unfortunately, in his haste for shelter and fire – he never looked up. A large clump of snow on the overhanging branches began to melt and move and soon fell on the fire, extinguishing it.

Mr. London’s stories rarely had anything close to a happy ending. So – what’s my point?

As experienced and professional as we may be, it is important – no…essential – to know the world around us and never take it for granted. For certain… “we always need to look up”. This standard “pokes us” to do that. The Introductory material was mostly covered in the last article. I will try and provide some direction and tools in the review of the actual requirements to follow.

Over the years, Clause 4.1 (mostly) said you had to have a Quality System, and the rest of the requirements detail the specifics that are required to be included. ISO 9001:2015 is somewhat different in causing you to look at the organization and “who” it is. Instead of just saying “I am”, the organization needs to look at itself in order to know who “I am”. Detail to follow…

4.1 Understanding the organization and its context

What are the internal and external issues that are relevant to the purpose and direction of the organization? Kind of – who are we and what are we trying to do? (Over the years we go through phases like being the innovator, low cost provider, mature/solid, premium product, etc.) The organization needs to be as clear as possible in its culture and nature. It is also necessary that everyone in the organization has the same understanding. This implies an understanding of the world around us and the need to understand, adapt and survive.

4.2 Understanding the needs and expectations of interested parties

Who is it that actually influences who “we” are and what we do? We are asked not just to “know” but to monitor, document and review how we know this. (I have “known” many organizations who were absolutely world class – and no longer exist.) I have worked for and done work for some of these organizations.

While watching an episode of a favorite series – “Mayday” (I learn something every time) – the airline went out of its way to make sure aircraft left on time. The objective was to ensure every passenger arrived on time. While this may be an admirable objective – wouldn’t the primary objective be just to ensure they “ARRIVED”? Because some necessary maintenance would have caused a delay, it wasn’t done. This aircraft took off on time – it just never arrived.

4.3 Determining the scope of the Quality management system

In the past, you mostly said this is what we do and typically the registrar tried to put it in 25 words or less – to have on your certificate. Are you missing some business you could capture because your scope is too narrow – or are you getting calls for product and material in a similar family – but which you’ll never provide? This standard does not provide “exemptions” as has happened historically. If there is a requirement that is not included, to exclude a requirement, there is justification that is required by the organization. The expectation is what is required in the standard to carry out the organization’s ability to meet the system requirements and provide its products and or services.

4.4 Quality management system and its’ processes

This is actually very close to ISO 9001:2008 – BUT – in the identification of the processes (however this may be done) – there is a need to specifically address the “risks and opportunities” embedded in these processes. The importance of identifying processes is not in the methodology (process mapping, flow charts, etc.) but in the content. While you have been required to identify processes in the past, there is an increased “clarity” not in how the process is identified but about “content” (my word). Is what you think you do in fact what you actually do?

Section 5 – Leadership…

…has significant changes from ISO 9001:2008 – Management – at least as much in structure as in content.

5.1 Leadership and commitment

There is significance in the word leadership as opposed to management. The demonstration of this leadership falls in section 5.1 with a great deal of specific detail expected from management to support the leadership expectation. The fact there are a lot of prompts in this requirement (especially in this section), leads us to the substance necessary to support the activities identified for leadership. The leadership in the organization is expected to “promote’ the process approach and “risk” based thinking. While this is quite a general expectation here, the concept of “risk” is specifically included in various requirements throughout this QMS. Customer focus (5.1.2) is included here with little change except to ensure the “risk” is determined and addressed.

5.2 Policy

The Quality Policy Statement currently available for most organizations would meet this requirement. As a tool, this could be the clear means by which the organization makes the statement “…this is who we are, will be and will remain our reason for success”. There usually has been a policy statement created, posted and mostly forgotten. I understand the reality that it’s difficult to spend much time on something not having an obvious clear impact on our “Quality” activities. It’s also difficult to harness enthusiasm for employment when it is uncertain that there will be a job. You may keep doing what you are doing and it will undoubtedly continue to be acceptable – because it has in the past. There is probably a big “gold star” for someone – somewhere – who can actually figure out a way for this requirement to add to productivity.

A minor change for our “Quality Policy” is it “is expected to be available to interested parties, as appropriate”. Not difficult but something to be considered.

5.3 Organizational roles and responsibilities and authorities

This was section 5.5 in ISO 9001:2008. There is a lot more useful detail here because it prompts for the specific information that details what is expected. I believe the biggest difference is there is no longer a specific requirement for a “Management representative” that had been in place from the beginning (1987). There is a definite focus on Leadership which would imply shared responsibilities in all those previously identified areas. I believe that is a good thing but the fact you’re not required to have “one” doesn’t mean you can’t. Any organization having a Quality System for any period of time has had a “management representative” and mostly found it useful as the “go to” person. I would continue with this role – not as the Captain of the ship – but the Navigator (just opinion).

The remaining requirements from Section 5 (9001:2008) in the past, are now covered throughout other sections of this ISO 9001:2015. “Ours is not to reason why…”

I started off with a little story. My intent was to share a bit of wisdom (such as it is) that can and should be applied everywhere. When done thoroughly and with as much clarity as possible – this should not be a bad thing. This also does not need to be terribly complicated. Carrying out these practices should cause us to consider the detail we need for our organization, not with fear, but with confidence in “the knowing”.

… and if we have not done this before – remember – to consider all the risk – we also need to “look up”.

ISO 9001:2015 – Tools and Suggestions to Begin the Move (Part 1)

By Michael Haycock, Sr. BRC Quality Consultant

There appears to be real hesitation about changing to the new standard – ISO 9001:2015. We understand the responsibility for maintaining your QMS takes a lot of time and effort. Then – those people who are distant from the actual work and practices decide that it is time for a change. The “gnomes” in Switzerland have been busy again. Actually, these are real people just like you and I (I think) who are identifying what are considered to be global “best practices” – and to have their approval – we have to carry out their expectations.

Our words of encouragement are:

While the words and structure are quite different, most of the requirements and expectations are close to what you’ve done in the past.

Make it practical. Give yourself as many (or few) options as are necessary. Document what you do or expect to do. What and how does it make sense?

Work with a “registrar” who will listen to you about what you do – instead of them telling you what else you need to do. Having worked as an auditor with a registrar for years, the first thing I knew was you were a “customer”. Secondly, while I knew the standard, I also knew it would be particularly presumptuous of me to assume to know your organization or what practices would be best for you – after 2-3 days in your organization. If your registrar is not providing value, and treating you like a customer – you need to consider alternatives.

Don’t curse the darkness – light a candle. (We’ll help with the candle.)

Here’s a start…

Use what you already have – wherever you can.

The standard is the premise for your QMS (Quality Management System) so use it. I have most frequently taken the “Standard” and blended it into a “Policy” Manual. First it clearly identifies what needs to be done – and ensures all requirements are covered. Second it provides a clear map to the actual detailed activities covered by your procedures, work instructions and any related documentation.

Now I hear voices (harmless) that a Quality Manual is no longer required. True – but what is required and what is useful may be different. While a “Policy” Manual is often a close reflection of the standard, the intent AGAIN is to provide direction. Especially with all the structural changes – how will that work for you? My suggestion is to keep much of the documentation you have in the form of procedures and work instructions “the same” or almost, and use the Quality Manual to point to how the requirements will be covered.

Example:

Requirements

Clause(s)

Reference to SOP

ISO 9001:2008

Management Responsibility

5.1 – 5.6

SOP – 5

ISO 9001:2015

Leadership

5.1 – 5.3

SOP – 5

Planning

6.1 – 6.3

Management Review

9.3

“SOP” stands for Standard Operating Procedure if you had one. My example is not an exact “one for one”, but the intent is to show we can keep much of what we’ve already done, and change and enhance whatever else is necessary. A procedure that would cover one requirement in the past could now be used to cover multiple sections – because of the structural change.

While words “procedures” and “records” are no longer specifically used, this is how most of us “humans” have identified documentation since 1987 – and will continue to do so.

There is a high level “Process Representation” of the structure of ISO 9001:2015 in the standard on Page viii. This could be a starting point for identifying processes. You may also keep much of what you already have done in process identification and add to what may not be clearly covered or needs to be enhanced.

This means the methods to identify processes – through process mapping, flow charts or your “historical” procedures – are your choice. While process mapping has been “pushed” (and I believe it is a good tool), there is no one right way. What is right is what works for you and what resources you have available to carry out these activities.

While the concept of “risk” is not new, the prominence of the word in the standard is.

Since you must identify your processes anyway, have a “process owner” identified (make this part of your Section 5 “Leadership” requirement). Once you have your processes laid out to the extent and detail necessary for your organization, use this as the starting point to identify and address risk. There are some complex tools and simple tools available to “articulate” what the risk may be and what controls may be necessary depending on the threshold the organization has established for itself. (I’m more of a “simple tool” person myself.)

While the significance of the risk is important, I believe what is most important is the actual identification of the risk in the first place. (A “risk” not identified will almost certainly be a risk not managed.) There are many ways these activities may be addressed – I always look for what is useful, practical and beneficial to the organization.

There is a need to understand how the new requirements relate to the old or current practices you have in place for ISO 9001:2008.

There is a bit of effort involved with this, but with a linkage between the old and the new this then allows you to know what you can keep, what can be modified, and finally what is new to be added. This is also the time to change what and where the organization feels there is value to be gained.

The quite radical change in structure and wording (not using procedures or records) has probably caused more concern than should be necessary. There are a number of activities that are clearly identified that would have been covered in the past, but most frequently unspoken or not specifically documented. We don’t want to overload, so we will try and provide an article with each review that will identify and hopefully “demystify” (I don’t get to say that much).

There is certainly much to do – we’ll work to help make it understandable.

… and our antelope and lion? We need to be running now more than ever – probably sooner and faster.

Lions and Antelopes

Mike’s articles often mention the antelope and the lion as a metaphor for the competitive business world. For those of you who are not familiar with the reference, here it is…

On the vast plains of Africa, the sleek, agile antelope beds down for the night, knowing that in the morning, to survive, it must run faster than the fastest lion or it will be eaten.

On the vast plains of Africa, the powerful and majestic lion beds down for the night, knowing that in the morning, to survive, it must run faster than the slowest antelope or it will starve.

To survive, you know one thing for certain. Whether you are the lion or the antelope, in the morning “you’d better be running!”

Question:

Hoping you can settle a difference in opinion. When completing an audit, we identified that we were not meeting our performance target in a particular process.

My co-worker’s stance is that it warrants an NCR, as it is a self-imposed requirement. My stance is that it is a target, not a requirement, and that not meeting it does not warrant an NCR.

Can you provide some guidance?

- Anonymous

Answer:

One is never wrong to initiate an NCR when a process has not achieved its intended outcome. At the same time, it also depends on the process which is being measured. If the target concerns a personnel performance target, then an NCR is not appropriate. If we are dealing with a target for process effectiveness or efficiency, I would seriously consider raising the NCR, if only to reinforce the need for process improvement to senior management.

If this is addressed as part of management review, as a specific agenda topic, then no NCR is required.

6 Keys to Improvement – Part I

By Ted Annis, BRC President

“Improvement” is one of the 7 (now modified) quality principles outlined within ISO 9001:2015, and is a fundamental component of any management system. We often see organizations making a commendable effort to improve processes, procedures, products, etc. Unfortunately, we also see some companies that are paralyzed by the process. The intent and effort is there, but while searching for a perfect solution they miss many opportunities for incremental improvements.

Do you recall the “Leaping Frog” problem from grade school math? A frog starts in the centre of a pond and tries to hop out, but each leap covers just half the remaining distance to the edge of the pond. Will the frog ever reach land? The answer, of course, is “no”. Although in time he will come frustratingly close, he will always leap just half the distance and will never reach his goal (unless we use university math, which I long ago swore not to revisit).

In the quality business, we work on a similar principle, but with a strikingly more optimistic outlook. Though our poor amphibian friend has an absolute objective (the shore or bust!), in quality we set improvement as our goal and understand the value of taking incremental steps forward.

An effective improvement process does require some structure, but when it comes to the goal of having a positive impact on your business, our Nike-like message is to “just do it”.

We’ve identified 6 key elements that you can use to help shape your improvement strategy. In this issue, we’ll look at the first 3…

1. Understand “Continuous” vs. “Continual”

In previous editions of the ISO 9001 standard, the operative term was “continual improvement”, and for many years we have encouraged organizations to note the difference between the concepts of “continual” and “continuous”. These terms are often used interchangeably without harm, but there is a subtle difference in meaning that can help to illustrate the point. Continuous is defined as “uninterrupted in time”, while continual means “of regular or frequent recurrence” – one long, ongoing effort vs. many independent actions.

The effort to improve should be continuous, but when it comes to actions supporting our QMS, we should be continually doing things (big and small) to make improvements.

Make sure that your approach/process/procedure is focused on doing things. It’s great to have systems, plans and elaborate procedures that are “continuously” in use, but real improvement comes through “continual” action and the repeated implementation of good ideas.

2. Set Goals (Objectives) and Take Steps

Of course, in Quality Management we are also quite big on setting goals and objectives. A Health & Safety target of zero lost time incidents in a calendar year may or may not be practical or reachable (depending on the organization), but certainly there is value in setting it and striving to reach it. It is important to remember that there is no silver bullet solution that will attain the objective. Searching for a grand solution may very well distract you from implementing smaller improvements, each imperfect on its own but still of value and an important part of the long-term effort.

3. Avoid Perfectionism as a Hindering Behaviour

While setting an objective of perfection is good practice, we must be on guard against perfectionism in the implementation of solutions. Perfectionism in its positive form motivates us to continually raise our standards and strive to improve both ourselves and our organization. Perfectionism in a negative form includes the belief that any work or output that is less than perfect is unacceptable, and often leads to the dismissal of very good ideas and solutions…on the grounds that they are not perfect.

Here are some signs to help you identify unhealthy perfectionism within your organization or QMS:

Goals are set at unrealistic levels. If a proposed plan can not reach these unattainable goals it is dismissed, often leading to unrealistic plans that are doomed to fail.

Mistakes are viewed as failures, and are often concealed for fear of punishment or embarrassment.

There is no recognition or celebration of achievement unless it reaches the organization’s definition of perfection.

Risks are not taken when there is no guarantee that the task can be executed perfectly. Instead, there is a preference for safer courses of action because of a greater likelihood of achieving the stated goals.

There is little focus on the process of learning and working; only the result matters.

Discussions often exhibit all-or-nothing thinking: either something is perfect, or it’s a failure.

There is a real reluctance to delegate tasks down the management chain for fear that they will not be handled to certain standards.

In Part 2 (coming soon!) we’ll share more suggestions and strategies to help with improvement. Visit our blog at www.thebrc.ca/category/blog or watch our next newsletter for more.